Ford Motor Company in India: Marketing the Ford Figo

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Case Details:

Case Code : MKTG296
Case Length :14 Pages
Period : 1980 -2011
Pub Date : 2012
Teaching Note : Not Available
Organization :Publix Super Market, Inc.
Industry : Retail
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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About Ford India

Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, USA, manufactured or distributed automobiles across six continents. With about 201,000 employees and about 90 plants worldwide, the company’s automotive brands included Ford, Lincoln, Mercury and Volvo. The company provided financial services through Ford Motor Credit Company.

Established in 1995, Ford India was a wholly owned subsidiary of Ford Motor Company with more than 2,300 employees. Ford started its operations in India in 1995 as a 50/50 joint venture with Mahindra & Mahindra2 (M&M).

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The company launched its first product in India ‘The Escort’ (C segment sedan) in 1996 from M&M’s Nashik Plant. In 1999, the Escort platform was ceased and Ford launched ‘Ikon’ from its new facility in Chennai. This was followed by the launch of Endeavour SUV in 2003, the Fusion in 2004 and the Fiesta in 2005. In March 2005, Ford bought out M&M’s 15% stake in the company.
For the period January to December 2006, Ford India posted an overall growth of 87%. In January 2008, Ford announced plans to invest US$ 500 million to double the capacity, set up an engine plant and launch Figo. Ford India registered a 3% overall annual growth in 2009 on year-on- year sales performance, selling a total of 29,488 units in this year compared to 28,563 units sold during the previous year.

Ford India did not register any significant growth in the passenger vehicle market in India (Refer to Exhibit V for Ford India’s sales compared to the total passenger vehicle sales in India). As of 2009, Ford India sold around 2,000 cars a month while the market leader Maruti Suzuki India Ltd3. (Maruti Suzuki) sold over 71,000 cars a month. In India, the largest manufacturer of small cars in the world, small cars accounted for 78% of the total cars sold. According to experts, the main reason for Ford India’s low sales volume in the country was its lack of presence in the small car segment in a market which was extremely price-conscious.

Excerpts - Next Page >>

2] It is the automotive division of one of the leading business conglomerates in India, the Mahindra Group. It manufactures multipurpose vehicles, light commercial vehicles, tractors for agriculture, and three wheelers.
3] Based at Gurgaon, it is one of the leading automobile companies in India that manufactures passenger cars, minivans, and sports utility vehicles.

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